QH and M Birt P/L v Pilon
[2001] QCA 340
•28 August 2001
SUPREME COURT OF QUEENSLAND
CITATION: QH & M Birt P/L v Pilon & Ors [2001] QCA 340 PARTIES: QH & M BIRT PTY LTD (ACN 009 963 222)
(plaintiff)
v
DENNIS BOYE PILON
(first defendant/first respondent)
JOANNE MAREE McGRATH
(second defendant/second respondent)
ELDERS INSURANCE BROKERS PTY LTD
(ACN 008 152 538)
(first third party)
PRIMAC ELDERS LIMITED (ACN 076 142 053)
(second third party/appellant)FILE NO/S: Appeal No 689 of 2001
DC No 1151 of 1999DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: District Court at Brisbane
DELIVERED ON: 28 August 2001 DELIVERED AT: Brisbane HEARING DATE: 20 July 2001 JUDGES: McPherson and Davies JJA, Philippides J
Separate reasons for judgment of each member of the Court,
each concurring as to the orders made.ORDERS: 1. That the appeal is allowed; but only to the extent that:
(a) judgment for the second respondent against the appellant is set aside; and
(b) the order that the appellant pay the second respondent’s costs of and incidental to the second third party’s proceedings be set aside.2. That the appeal is in all other respects dismissed with costs.
CATCHWORDS: APPEAL – INTERFERENCE WITH JUDGE’S FINDINGS OF FACT – WHERE FINDINGS BASED ON CREDIBILITY OF WITNESS – reluctance of appellate court to interfere – whether trial judge acted on evidence inconsistent with facts incontrovertibly established or which was glaringly improbable – whether trial judge acted on evidence which was so overborne by documentary evidence as to warrant interference
Devries v Australian National Railways Commission (1993) 177 CLR 472, followed
Perpetual Executors and Trustees Association v Wright (1917) 23 CLR 185, 196, followed
State Rail Authority of New South Wales vEarthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306, consideredCOUNSEL: A M Daubney SC for the appellant
J C Bell QC with KC Kelso for the respondentsSOLICITORS: Minter Ellison for the appellant
A W Bale & Son for the respondents
McPHERSON JA: For the reasons given by Philippides J this appeal should be allowed; but only to the extent that:
(a) judgment for the second respondent against the appellant is set aside;
and
(b) the order that the appellant pay the second respondent’s costs of and incidental to the second third party’s proceedings be set aside.
In all other respects the appeal is dismissed with costs.
DAVIES JA: I agree with the reasons for judgment of Philippides J and with the orders she proposes.
PHILIPPIDES J: On 23 July 1998, a Kenworth Prime Mover and an Allison Low Loader owned by the first and second respondents overturned on the Eton Range, near Nebo. At the time, the vehicle was transporting an excavator owned by the plaintiff, QH and M Birt Pty Ltd, from Gregory Downs to Mackay. The excavator was extensively damaged. At the outset of the trial the plaintiff obtained a consent judgment against the respondents for the loss suffered by the plaintiff as a consequence of the damage to the excavator. The only matter for determination at the trial concerned the third party proceedings issued against the appellant by the first respondent; in essence, whether the first respondent was entitled to indemnification from the appellant, the learned trial judge finding in favour of the first respondent. It is with that determination that this appeal is concerned.
It is convenient to outline the factual background as found by the learned trial judge. The respondents are husband and wife who have operated a business together since about 1992, the second respondent, Mrs McGrath, being more concerned with the administrative side of the business, and the first respondent, Mr Pilon, being more involved with the practical machinery side of the operation. The business had developed and grown over a period of years. The respondents had owned a low loader and truck when they settled in Winton in 1994 and began working for the Winton Shire Council. The second respondent described this as “low loader work” which involved carrying machinery on the low loader to various work places within the Shire. Gradually, as the business grew, they owned a number of water tanks and other items of equipment as well as the low loader. They performed work for other Shire Councils as well as working at mine sites in western and north western Queensland. This included water truck work as well as the carrying of machinery on the low loader for various clients. The low loader was used to transport a range of machinery, including graders, rollers and stabilisers. The second respondent had known the appellant’s agent, Mr Mason since 1994 and she and the first respondent had organised their insurance through Mr Mason for several years.
The third party proceedings against the appellant pleaded a claim against it as insurance broker for damages under the Trade Practices Act for breach of s 52, or alternatively negligence, the third party notice alleging:
“(a) The appellant’s agent, Mr Mason, had represented to Mr Pilon that Mr Mason could and would arrange insurance to insure Mr Pilon against liability for damage to goods carried by Mr Pilon in the course of his carrying business;
(b) On 11 May 1998, Mr Pilon received from the appellant a document entitled “New Policy Schedule” in respect of insurance policy number 10M205965900, described to be operative from 9 March 1998 until 9 March 1999, and to be underwritten by Commercial Union Assurance Company of Australia Limited;
(c) The New Policy Schedule was accompanied by a document entitled “Liability Insurance, Broad Form Policy, CGU Insurance”;
(d) Mr Pilon paid the appellant the premium of $1,844.50 in reliance on Mr Mason’s representation;
(e) The representation was misleading and deceptive because the policy did not provide insurance cover in respect of loads being carried by Mr Pilon;
(f) Alternatively, Mr Mason’s conduct in arranging the insurance was negligent because he failed to arrange or ensure that the policy included coverage for liability for damage for goods carried on Mr Pilon’s prime mover and low loader.”
The representation alleged to have been made by Mr Mason was, on the respondents’ case, made in the course of a meeting which the learned trial judge found occurred on 9 March 1998. In paragraph 4 of the Third Party Notice, the respondents alleged that during the meeting with Mr Mason:
“(a)they advised him about the nature and type of equipment that they were hauling in and around Queensland and in particular on the low loader and further in particular advised him that they were, at the time, carrying heavy equipment namely loaders and D9 caterpillars for the Plaintiff Q.H. & M. Birt;
(b)they advised Vince Mason that some equipment carried by the Defendant was worth in excess of Two million dollars;
(c)they advised Vince Mason that they required insurance cover to insure against loss or damage occurring to equipment being carried by them.”
The respondents provided the following further particulars of that meeting:
“4.Concerning paragraph 4 of the Third Party Notice the [respondents] were in the Third Party’s office discussing generally with Mason the value of requirement being carried by them. At the time the First [respondent] told Mason they were carting Huddy’s big equipment, 988 loaders and D9’s. Mason asked the First [respondent], “how high (meaning insurance cover) he wanted to go”. The conversation was such that Mason was informed the equipment might be worth more than 2 million dollars for insurance and the [respondents] should up the insurance to cover it. The First [respondent] asked how much higher they could go to which Mason responded 5 million dollars was as high as the insurers would go and that the First [respondent] said that he would take it. The entire conversation was centred upon the load and having enough cover in respect of it.”
By its defence, the appellant denied that any conversation occurred as alleged in paragraph 4 of the Third Party Notice, and further denied that the respondents ever required insurance cover against loss or damage occurring to equipment being carried by them as referred to in paragraph 4 of the Third Party Notice. It was also expressly denied that Mr Mason represented to Mr Pilon that he could and would arrange insurance to insure Mr Pilon against liability for damage to goods carried by Mr Pilon in the course of his carrying business.
At the trial, evidence was given by both respondents and Mr Mason. The critical issue for determination was a question of fact, namely whether the respondents had requested Mr Mason to arrange insurance which would cover them for risk of damage to their clients’ machinery while being transported by them in the course of their business. The learned trial judge sought to determine this issue by resolving a question of credit between the respondents and Mr Mason as to what had transpired at the meeting found by his Honour to have taken place on 9 March 1998.
The learned trial judge concluded that a request had been made at the meeting on 9 March 1998 for insurance cover for damage to machinery being carried by the respondents in the course of their business, by preferring the evidence of the respondents over that of Mr Mason. The learned trial judge made the following findings in reaching his conclusion:
(a) that the respondents’ business involved transporting machinery for other contractors and Shire Councils;
(b) that in critical areas, the evidence of the respondents would be preferred to the evidence of Mr Mason;
(c) that Mr Mason must have known the real nature of the respondents' business;
(d) that it was probable that the respondents would have discussed the nature of their work in the context of discussing their insurance requirements with Mr Mason on 9 March 1998;
(e) that at the meeting on 9 March 1998, the respondents' concern lay with the need to obtain adequate insurance cover for the large machinery that they were carrying at the time;
(f) that the request had been made of Mr Mason, who knew their business well and who can have been in no doubt as to the cover that was requested.
On behalf of the appellant it is contended that, despite the advantage had by the learned trial judge of having seen the witnesses, this is a case where his Honour’s findings are so contrary to the evidence and so contrary to the compelling inferences to be drawn from the evidence, that interference in the conclusion reached by the learned trial judge by this Court is permitted. In making this submission the appellant relies on State Rail Authority of New South Wales v Earthline Constructions Pty Ltd[1], where a trial judge’s finding of fact was overturned in circumstances where the trial judge had placed inappropriate emphasis on the demeanour of witnesses, while overlooking a substantial body of other evidence. Nevertheless, the High Court, in Earthline Constructions (supra) expressly affirmed the following observations of Brennan, Gaudron and McHugh JJ in Devries v Australian National Railways Commission[2] as to the correct approach of an appellate court where findings of fact based on credibility are challenged:
“More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding of fact.[[3]] If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge ‘has failed to use or has palpably misused his advantage’[[4]] or has acted on evidence which was ‘inconsistent with facts incontrovertibly established by the evidence’ or which was ‘glaringly improbable’.”[[5]]
[1](1999) 73 ALJR 306.
[2](1993) 177 CLR 472 at 479.
[3]See Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842; Jones v Hyde (1989) 63 ALJR 349; Abalos v Australian Postal Commission (1990) 171 CLR 167.
[4]SSHontestroom v SS Sagaporack [1927] AC 37 at 47.
[5]Brunskill v Sovereign Marine & General Insurance Co Ltd (1985) 59 ALJR 842 at 844.
Grounds 1, 3 and 5
The appellant appeals on the grounds that the learned trial judge erred in finding that a request was made on 9 March 1998 for insurance cover for damage to machinery being carried by the respondents in the course of their business; that the respondents’ evidence does not support this finding; and that the learned trial judge ought to have found that the respondents’ evidence on this issue was equivocal and contradictory. A further ground of appeal is that the trial judge failed to give any weight to the inconsistencies between the oral evidence of the respondents and the pleadings delivered on their behalf.
On behalf of the appellant it is submitted that the respondents’ evidence as to what transpired at the meeting was confused, confusing and evasive.
Although the learned trial judge did not specifically list each particular of inconsistency in respect of the respondents’ evidence inter se and in relation to the pleaded case, it is clear that the learned trial judge was mindful of criticisms relating to “inconsistencies and uncertainties” in the respondents’ evidence as to the detail of their discussions with Mr Mason. His Honour explained such inconsistencies and uncertainties, by noting, as he was entitled to do, that “it would be unrealistic, given the passage of time and the nature of the discussion, to expect recall of conversations in detail”. His Honour dealt specifically with some of these matters explaining, for example, the reference by the second respondent in her evidence to “public liability insurance” rather than liability insurance, on the basis that she was “unsophisticated” in insurance matters.
Further, I am unable to accept the submission on behalf of the appellant that the learned trial judge’s finding concerning the relevant request for insurance was not supported by the evidence. On the contrary, in my opinion there was, in addition to the evidence quoted by the learned trial judge, ample evidence by both respondents to support a finding that the respondents had indicated to Mr Mason that they required insurance cover for the large machinery they were carrying for others, inter alia their clients Birt and Huddy.
In my opinion these grounds of appeal must fail.
Ground 2
A further ground of appeal is that the learned trial judge erred in preferring the evidence of the respondents to that of Mr Mason. The learned trial judge had the advantage, not enjoyed by an appeal court, of observing the witnesses. His Honour had ample opportunity to assess the credit of the respondents and their account of what transpired at the meeting of 9 March 1989, and was especially well positioned to do so, since, as his Honour noted, the respondents were subjected to a detailed and lengthy cross-examination. Moreover, as the learned trial judge expressly made clear, in reaching his conclusion as to the respondents’ credit, his Honour was “not unmindful of the criticisms that have been made of their evidence”.
In rejecting Mr Mason’s evidence, that he did not know that the respondents were engaged in haulage, that at the meeting on 9 March 1989 no mention was made of the haulage by the respondents of clients’ machinery, and that no request was made for insurance cover for such haulage, his Honour had regard to a number of matters. His Honour took into account the fact that after the accident, Mr Mason made a claim under the policy as requested, notwithstanding his assertion that he had always appreciated that such a policy did not cover the damage claimed by the respondents. His Honour also considered, as he was entitled to, Mr Mason’s demeanour, when pressed in cross-examination as to why he had proceeded to make a claim, given that assertion and Mr Mason’s explanation for having done so which his Honour referred to as “unconvincing”. His Honour also had regard to the fact that the respondents’ “regular enquiries [as to the progress of their claim]… were met with the response “Everything is fine, do not worry about it”. Further, his Honour also noted that it was “odd that he should have continued to offer reassurance to the [respondents] long after the claim …was rejected”. These were all matters which his Honour was entitled to consider in assessing credibility.
In the circumstances, I am unable to accept the submission made on behalf of the appellant that the assessment of the learned trial judge of the evidence “was flawed by an inappropriate assessment of the credibility of the witnesses”. Accordingly this ground of appeal also fails.
Ground 4
A further ground of appeal is that the learned trial judge erred in failing to give weight to the documentary evidence which was inconsistent with the respondents’ oral evidence.
Counsel for the appellant referred to documentary evidence which was said to be inconsistent with the respondents’ evidence concerning to the true nature of their business, and which showed that the respondents’ business was solely one of earthmoving; for example the respondents’ letterhead referred to their business as “Pilon Earthmoving”, and previous insurance documents referred to their business as earthmoving. I am not persuaded that the learned trial judge failed properly to consider this documentary evidence. Indeed his Honour specifically referred to this criticism of the respondents’ evidence, observing:
“…Amongst these criticisms was the suggestion that their real business was that of earthmoving contractors and that they would not have required any form of carriers’ insurance. The [respondents’] business had long been known as Pilon Earthmoving, and there is no doubt that earthmoving and roadworks did form a part of that business. However, I am satisfied that the name did not accurately describe the true nature of the work carried out by the business over the years. The suggestion that the business was fundamentally one of earthmoving was forcefully and convincingly denied by Mrs McGrath and I accept the [respondents’] evidence that they were involved in transporting machinery for other contractors and shire councils…”
The manner in which counsel for the appellant developed this ground of appeal was to contend that the documentary evidence was such that the learned trial judge’s finding that Mr Mason “must have known…the real nature of [the respondents] business” could not be sustained. In making this submission, counsel for the appellant noted that it was conceded at trial by the second respondent that no document was ever sent to Mr Mason before 1998 describing the respondents’ business as carriers or haulers. However, in my opinion it was nevertheless open to his Honour to make an imputation of knowledge by Mr Mason of the true nature of the respondents’ business, based on his Honour’s findings that the respondents “had had a long association with Mr Mason” and that Mr Mason “knew the business well”. In any event, his Honour proceeded to find the appellant liable, not only on the basis of his finding of Mr Mason’s imputed knowledge of the respondents’ business, but additionally on his finding that it was probable that the respondents “would have discussed the nature of their work in the context of discussing their insurance requirements with Mason on 9 March 1998”.
In my opinion his Honour had sufficient regard to the documentary evidence. Nor can it be said that this is a case where the oral evidence accepted by the learned trial judge was so “overborne” by the documentary evidence as to warrant interference with his findings: see Perpetual Executors and Trustees Association v Wright[6]. It follows that this ground of appeal must fail.
[6](1917) 23 CLR 185, 196 per Barton J
Ground 6
The final ground of appeal is that the learned trial judge erred in failing to give sufficient reasons for his finding that a request was made on 9 March 1998 for insurance cover for damage to machinery being carried by the respondents in the course of their business. Although this ground was not abandoned, counsel for the appellant did not appear to press it in oral submissions. In any event, in my opinion, the learned trial judge adequately and properly set out his reasons for concluding that the request for insurance cover as found by him had in fact been made. I do not consider that there is any basis in this ground of appeal.
It follows that I do not consider that counsel for the appellant, notwithstanding his able submissions, referred to any error such as to warrant interference with his Honour’s findings. The evidence of the respondents accepted by the learned trial judge was not in conflict with facts incontrovertibly established nor was it glaringly improbable.
Accordingly, the appeal insofar as it relates to the aforementioned grounds fails. However, there is one matter where the learned trial judge has erred. The learned trial judge misapprehended that the Third Party Notice had been issued in the names of both respondents, when in fact it was issued by the first respondent only, and thus mistakenly gave judgment against the appellant in favour of both respondents. It has been agreed by the parties to this appeal that any judgment upheld on appeal against the appellant should only be in favour of the first respondent. Accordingly, I would allow the appeal, but only to the extent that judgment for the second respondent is concerned, which should be set aside, as should the costs order made in favour of the second respondent against the appellant. In all other respects the appeal is dismissed with costs.
The orders I would propose are:
1. The appeal is allowed; but only to the extent that:
(a) judgment for the second respondent against the appellant is set aside;
and
(b) the order that the appellant pay the second respondent’s costs of and incidental to the second third party’s proceedings be set aside.
2. The appeal is in all other respects dismissed with costs.
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